Budget 2024: Government to Lower Deficit in 2024-25 Fiscal Year on Lifting Capital Expenditure to All-Time High

The Government may lower deficit in 2024-25 fiscal year on lifting capital expenditure to all-time high in the budget 2024
Budget 2024 - Government deficit reduction - Capital expenditure - Fiscal deficit - Central Government - TAXSCAN

The Central Government will focus to lower deficit in the 2024-25 fiscal year despite lifting capital expenditure to an all-time high and is aiming to narrow the fiscal deficit to 4.50% of GDP by the end of the 2025-26 fiscal year ( FY ) from 5.90% in the current year to end-March 2024.

With anticipation of a boost in private investment, capital spending has already increased by more than 33 per cent this fiscal year to over 10 trillion rupees ( $120 billion ) and is expected to rise by 15 per cent, reaching Rs 11.50 trillion.

As the main focus is the deficit, welfare schemes are not likely to grow much, and gross borrowing of 15.60 trillion rupees is anticipated to remain mostly constant from the projection for the current year. “There are growth challenges that we remain wary of. Private non-infrastructure business capex is conspicuous by its relative absence,” said Kunal Kundu, India economist at Societe Generale.

Capital spending has already surged more than 33% this fiscal year to over 10 trillion rupees ( $120 billion ) and is projected to rise 15% in the next, reaching 11.50 trillion rupees, with expectations of an increase in private investment.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates